Australia has pulled a thorn out of the relationship with Indonesia, lowering for the first time in a decade an official warning that told people to reconsider travel to the country.

The move is a clear sign Australian intelligence agencies are confident Jakarta has largely smashed terrorist networks responsible for deadly bombings against Westerners in Bali and elsewhere in Indonesia.

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Yesterday the Foreign Affairs Minister, Bob Carr, rang his Indonesian counterpart, Marty Natalegawa, to say Australia had lowered its rating for Indonesia, urging people to "Exercise a high degree of caution".

This is the second level on the four-tier rating system, with the top warning, "Do not travel".

Indonesia had long complained at being ranked in the third tier with Pakistan and Nigeria.

The advice for Indonesia has been broken to regions, with the third tier "Reconsider your need to travel" still applied to Central Sulawesi, Maluku, Papua and West Papua provinces. Indonesia is now in line with the Philippines, India and Thailand.

The Foreign Affairs Department said: "The decision to lower the overall level of advice has been based on a carefully considered assessment of the level of risk to Australian travellers in Indonesia. "